Consultant Can Be Held Primarily Liable: 10th Circ.

Law360, New York (September 9, 2008, 12:00 AM EDT) -- A nonemployee consultant who plays an integral role in preparing fraudulent financial filings can be held as a primary violator of federal securities laws in enforcement actions brought by the U.S. Securities and Exchange Commission, a federal appeals court has ruled in a case involving a consultant for F10 Oil and Gas Properties Inc.

The question that determines liability is whether the consultant made the fraudulent statements, regardless of whether the statements were publicly attributed to that individual, the U.S. Court of Appeals for the Tenth...